The AER is required to remake its decision on the distribution determination that applies to Essential Energy for the period 1 July 2014 to 30 June 2019 (the remittal).
Essential Energy has advised it will be submitting a revised proposal for the 2014-19 remittal that will accept key aspects of our original decision, upon which we will publically consult.
In April and June 2015 the AER published final decisions on distribution determinations for NSW and ACT electricity distributors (Ausgrid, Endeavour Energy, Essential Energy and ActewAGL Distribution) for 2019-24, and on the access arrangement for the NSW gas distributor, Jemena Gas Networks for 2015-20.
All five businesses sought merits review of the AER’s final decisions. The Public Interest Advocacy Centre (PIAC) also applied for review of the AER’s NSW final decisions. The Commonwealth minister intervened.
The Tribunal handed down its decisions in February 2016 (and March 2016 for JGN). It remitted the decisions back to the AER to be remade, in particular in accordance with its orders regarding the return on debt; the value of imputation credits (gamma), which is relevant to the businesses’ tax allowance; the four electricity distributors’ operating expenditure (and for ActewAGL the implications of this for the Service Target Performance Incentive Scheme); and aspects of JGN’s capital expenditure.
In March 2016 the AER sought judicial review of the Tribunal’s decisions on gamma, return on debt and opex in the Full Federal Court.
The Court upheld the AER's appeal in respect of the Tribunal's construction of the rules regarding gamma, which feeds into the businesses tax allowance. The Court dismissed the AER's appeal in relation to the cost of debt and the operating expenditures of the electricity businesses.
The AER must now revisit its decisions on return on debt; the four electricity distributors’ operating expenditure (and for ActewAGL the implications of this for the Service Target Performance Incentive Scheme); and aspects of JGN’s capital expenditure.